In several earlier bankruptcy blogs, I explained that one of the reasons I am such an avid reader of business and economic news has to do the job situation in Indiana. First of all, job loss is one of the big three factors that lead to bankruptcy. Sometimes individuals or families are already stretched thin financially. Perhaps it’s because of medical expenses or divorce. Perhaps, along with those factors, their mortgage rate has just reset and their monthly payment is much higher. Or perhaps their property was hit with the awful flooding we’ve had in the southern part of the state. On top of one or more of these bad things, if they’re laid off from work, it can overwhelm the most financially responsible people. Since I live in the state of Indiana and practice bankruptcy law here, I’m particularly alert for stories that have to do with the automotive industry, which has been such a central part of the Indiana’s economy.
While headquartered in Detroit, GM has, over the years, provided thousands of jobs for Indiana workers. Just a few weeks ago, as I mentioned in Bad News Can “Wheel” Better News To Indiana, I caught a good news piece about the fact that one of GM’s Pittsburgh plants is closing, and GM is moving equipment from there to a stamping plant here on the west side of Indianapolis, possibly saving the jobs of the 900 workers there.
Then, just about two and half weeks ago, GM announced that a quarter of its U.S. hourly workers, 19,000 people, have agreed to take the company’s buyout offer or early retirement offer. These workers will all be leaving by next week! Now the company says it may hire up to 16,000 non-assembly workers at half the old wage (which was $28 an hour). All three big auto companies have been restructuring their work force. A month ago 4,200 Ford Motor Company hourly workers accepted buyout offers, and more offers are being made by both Ford and Chrysler.
It’s interesting that each of these items could present both good and bad news to individual workers. As I mentioned above, with already overstretched finances, many families will be dealt a terrible blow by having a breadwinner being laid off work. On the other hand, lower paying jobs are opening up that can provide income for people who are now out of work altogether. The ability for one of my bankruptcy clients to get a new job after a layoff, or for a single parent to re-enter the work force following a divorce, the process of re-establishing credit after a bankruptcy – all these things depend on a healthy job market in our state. I advise everyone to get as much training as possible, to be flexible, and to stay hopeful.